You Ask We Answer
Q 413: We want to know whether the provision of SCOMET is applicable on import.
A: 1. New chapter number 10 on Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) was introduced in FTP/ HB 2023 for the first time.
2. In this chapter, general provision governing the export of dual use items are covered.
3. India is a signatory to international conventions on disarmament and non-proliferation.
4. The objective of SCOMET is control on weapons of mass destruction and their delivery system.
5. This aims to fail the efforts related to terrorist activities.
6. The guideline is on export of goods from India.
7. These provisions are not applicable on import into India.
Q 414: We have exported goods overseas but the buyer has only paid 60% of invoice value. We have tried our best but it seems difficult to realise the remaining amount. What should we do regarding this non-realisation?
A: 1. Every exporter must realise and repatriate the full invoice value of goods exported.
2. RBI has prescribed the time limit of 9 months from the date of export subject to extended period allowed by your bank - Circular No. 37.
3. The objective of giving export incentives is to earn foreign exchange.
4. The incentives are directly in proportion to export realisation in foreign exchange.
5. If you realise lesser amount than the invoice value, then you should calculate your entitlement based on amount actually realised by you.
6. Duty Drawback and RoDTEP are given to the exporter on the assumption that the exporter will realise full invoice value.
7. In case the exporter fails to realise and repatriate export proceeds within stipulated period or within extended period, then it will be regarded that such rebate shall be deemed never to have been allowed.
8. The incentive is calculated on full invoice value at the time of issue.
9. Exporter must refund the excess incentives to the concerned authority along with applicable interest.
10. Those incentives which are to be applied based on realisation will be automatically reduced at the application stage.
11. Exporter will also require regularising non-realisation of forex with his bank to comply with FEMA provisions.
12. You may approach your banker and request for write-off of unrealised export bill.
Q 415: A company has imported certain components under payment of duty. These components are found to be defective and the supplier is willing to take them back. Please advise how the company can return the components to the supplier? What will happen to the duty paid at the time of import?
A: 1. Goods imported, found defective can be re-exported.
2. At the time of sending goods to your original supplier, you will require to prepare all necessary documents.
3. Invoice, packing list, export declaration form etc. will be required.
4. Your invoice will have full particulars of the defective components.
5. Since no foreign exchange will be realised, you have to declare accordingly.
6. In case full amount of import was already paid, then the amount of defective components are to be recovered by you and the same should be reflected in your invoice.
7. In case the overseas supplier is going to replace the defective components, then this arrangement should also be indicated in the invoice.
8. Necessary GR waiver should be obtained from your bank.
9. The same is to be submitted to the Customs at the time of clearance.
10. The Customs officer may verify import documents at the time of shipment.
11. Country of Origin will be that of the country of supply.
12. Your correspondence with the supplier should also be kept handy for Customs or bank.
13. You can also work out the possibility of Section 74 of the Customs Act, 1962 for the refund of import duty paid earlier at the time of import.
14. Section 74 is subject to certain conditions which must be properly studied.
15. The Custom Broker who has cleared your import will be a better option at the time of export of the goods.
16. Proper paperwork is essential.